BP Faces New Suit from Feds

Monday, December 20, 2010 @ 05:12 PM gHale

Now all the legal wrangling has officially begun with the Department of Justice filing a civil lawsuit in New Orleans against BP and eight other companies over the oil spill in the Gulf of Mexico.

Although the complaint does not specify the damages that the administration is seeking, the fines and penalties under the laws cited in the complaint could reach into the tens of billions of dollars.

“We will not hesitate to take whatever steps are necessary to hold accountable those who are responsible for this spill,” said Attorney General Eric H. Holder Jr.

The department was “making progress” on a criminal investigation of the companies involved in the spill, Holder said.

The Deepwater Horizon rig burned and sank in April, killing 11 workers and leaving the well it was drilling to gush out of control on the gulf floor. Millions of gallons of crude oil spilled before they were able to cap the well in July.

The government is alleging violations of federal regulations concerning the operation and safety of oil rigs, including the failure to take necessary precautions in securing the rig before the explosion and the failure to use the safest drilling technology.

The nine defendants include BP and its partners in owning the well, Anadarko Petroleum and MOEX Offshore 2007, as well as BP’s operating partners, including Transocean, the owner of the rig, and insurers. The government filed the 27-page complaint in Federal District Court in New Orleans, where thousands of spill-related lawsuits are already on file.

Halliburton, the contractor for the cement work on the well, was not a defendant, but Holder said they could amend the complaint later. The complaint specifically cites failures of cementing as a factor that contributed to the spill.

Scott D. Dean, a spokesman for BP, said the filing “does not in any manner constitute any finding of liability or any judicial finding the allegations have merit.” The company, he said, will continue to work with the government, and he noted BP had created a $20 billion fund to pay “all legitimate claims” from the spill, “before any legal determination of responsibility and will continue to fulfill our commitments in the gulf as the legal process unfolds.”

Transocean denied liability in a statement, saying the company followed “calculations, blueprints and step-by-step construction procedures” from BP that federal regulators approved. Responsibility “lies solely with the well’s owner and operator,” the company said.

John Christiansen, a spokesman for Anadarko Petroleum, which owns 25 percent of the well, also placed the blame on BP. He said in the case of gross negligence or willful misconduct, the operating agreement between BP and the other owners places the liability with BP — and, he said, “the operator’s decisions and actions on the rig likely amount to gross negligence and/or willful misconduct.”

A spokesman for MOEX, which owns 10 percent of the well, said the company was reviewing the filing, but added that MOEX “had no authority or responsibility to direct activities on the Deepwater Horizon.”